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ITURAN: Priced Like Hardware, Performing Like SaaS

Summary 

  • I am rating Ituran Location and Control a Strong Buy because it is being priced like a hardware manufacturer but performs like a high margin SaaS style telematics platform. 


  • Over 70-74% of revenue comes from recurring subscription services. This generates predictable cashflows, strong margins, and compounding subscriber growth. 


  • It has strong subscriber growth and continued OEM partnerships. 


  • Its FWD Non-GAAP P/E and FWD EV/EBITDA are far below comparable subscription and telematics software businesses. 


  • Its strong cash generation and balance sheet position it for both earnings growth and potential valuation multiple expansion.


     

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